Trade and tradition

What does it take to build a large conglomerate/ run your business successfully? Can someone be TAUGHT to run a large organization or does it run in families?

Let us look at the top 10 billionaires in India.

Name

Community

State

Mukesh Ambani

Bania

Gujarat

Lakshmi Mittal

Marwari

Rajasthan

Azim Premji

Islam

Bombay

Pallonji Mistry

Parsi

Bombay

Adi Godrej

Parsi

Bombay

Savitri Jindal

Punjabi (Agarwal)

Haryana

Shashi and Ravi Ruia

Marwari

Rajasthan

The Hinduja Brothers

Sindhi

Bombay/ Rajasthan/ Gujarat

Kumaramangalam Birla

Marwari

Rajasthan

One can very clearly see that all of them are Banias, Parsis and Marwaris with the sole exception of Azim Premji. One can also see that the bulk of the wealth has been generated from the princely states of Rajasthan, Gujarat and Bombay – from traditional business families.

Although no South Indian figures in this list of top 10, here too, we see people from traditional business communities doing better than others. In Tamilnadu, the bulk of the businessmen belong to the Chettiaar and Nadar communities. In Andhra, the Rajus, Reddys and Vaisyas make more business headlines than others. Likewise, in other states.

In India, castes seem to have been formed based on the character and nature of work done by people, essentially based on differential labour (specialization). Pooling people who do the same job together resulted in expertise and a climate to nurture and grow the developed proficiency. These castes have nurtured different acumen and skill among different sects of people. This, I believe makes people sharper and allows for the system to grow. For thousands of years, people across generations have been trained to do a particular task. A Marwari kid is most likely to see a business environment and face business issues at a much earlier age than others. They have been bred in and grown up in a specific environment which allows them to gain a much better business acumen compared to others. At best, a business school can provide a simulated environment. These guys are thrown into the real world and obviously real life experience counts for much more. They have a social circle that walks and talks business and hence gain much more exposure than the rest of us can.

It is just like, a tea estate owner’s son knows a lot about tea business than others do and a garage owner’s daughter will know more about repairing cars than others. If exposed to an international business school, they can probably fine tune some of their skills but the basic learning is done on the field, when young!

I do not mean to say that a person belonging to some other caste shouldn’t do business. The point I am trying to make is that the huge edge that members of traditional business families is simply absent in the rest of us. It is a huge void to fill. These castes have also ensured that business learning is passed on to the next generation, without fail or compromise. The knowledge is retained unlike many modern business units that do not have a proper successor to take over. They have that inherent ability to take risks. If they fail, they will try again. In fact, they are encouraged to. I haven’t seen a Parsi change careers because his business didn’t flourish.

I do not see any other person doing business any better than these traditional business guys. And the table above clearly shows that corporate India/ MBA schools don’t seem to have produced different results.

I spoke to one of my friends, a Research Scientist on Genomics and he tells me that there was no genetic similarity that could be attributed to their doing business with such flair was found. So, it basically is the caste system in India that has given rise to the rich businessmen!! Many chide India for developing a caste system. Yes, it does have its disadvantages and at many points in time, has been ridiculous. But I feel that those should have been addressed. By opting to completely do away with the system, we are losing a lot of advantages that cannot be found elsewhere.